Tax Regions

Use tax regions to include only the appropriate tax codes for a vendor or client in the Tax Code drop-down list in AP voucher entry, AP disbursement entry, and invoice billing terms.

The appropriate tax codes for a vendor or client are based on the vendor or client's tax country and a tax code's region, which is associated with a country.

You must complete the following setup steps:

• You set up tax regions and associate them with countries in the Tax Auditing Feature section of the Options form in Settings > Cash Management > Options.
• Enter a tax country for vendors and clients in the Firms hub. Enter a separate tax country for each address that you enter for a vendor and client.

A country can have only one tax region. You can use the same tax region for multiple countries. For example, you can have one tax region (such as EU) for all of the countries in the European Union.

When no tax country is entered for a vendor or client, all tax codes display in the Tax Code drop-down lists in AP voucher entry, AP disbursements entry, and invoice billing terms for that vendor or client.

When a vendor or client has a tax country that is not associated with any tax region, then only the tax codes that have no region assigned display in the Tax Code drop-down list.

Tax regions do not affect how default tax codes are populated for transactions.

In AP Voucher and AP Disbursement entry, the Tax Code field is located on the Tax Codes dialog box that opens when you click the hyperlink in the Total Tax Amount field. In Billing Terms, the Tax Code field is located in the Taxes grid on the More Calculations tab of Hubs > Projects > Billing Terms.

AP Voucher and AP Disbursement Example

• The country of Belgium is assigned to the EU tax region.
• Ten tax codes are assigned to the EU tax region. The status of all 10 tax codes is Active, and they all have the Transaction Entry check box selected in the Inputs section of Settings > Cash Management > Tax Codes.
• BE (Belgium) is the tax country that is entered for vendor Brown and Associates in the Firms hub for their Belgium address.

When you enter an AP voucher or AP disbursement in Transaction Entry for Brown and Associates using their Belgium address, only the 10 tax codes with the EU tax region display in the Tax Codes drop-down list on the transaction entry forms.

Invoice Billing Terms Example

• The country of Belgium is assigned to the EU tax region.
• Ten tax codes that are assigned to the EU tax region. The status of all 10 tax codes is Active, and they all have a check box selected in the Outputs section of Settings > Cash Management > Tax Codes.
• BE (Belgium) is the tax country that is entered for client Sitka Corporation in the Firms hub for their Belgium address.

When you enter Billing Terms for the Sitka Corporation using their Belgium address, only the 10 tax codes with the EU tax region display in the Tax Code in Billing Terms (in the Taxes grid on the More Calculations tab of Hubs > Projects > Billing Terms.